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Small business owner weighs in on hike to federal wage subsidy

WINNIPEG --
A small business owner is welcoming a major hike to the wage subsidy announced Friday by the federal government to help companies deal with the effects of COVID-19.

Wage subsidies for qualifying businesses have been boosted to cover 75 per cent of an employee’s pay cheque, up from a previous commitment of 10 per cent.

It’s available for three months and is retroactive to Mar. 15, 2020, according to the federal government.

"This means that people will continue to be paid even though their employer has had to slow down or stop its operation,” Prime Minister Justin Trudeau told reporters.

Fashion designer and retailer Sarah Sue MacLachlan hopes the measure will help her small business, Sarah Sue Design.

“The 10 per cent that they did last week really didn’t help I’d say, any of us, so I’m really happy to see that they are listening,” said MacLachlan.

She said her business has been hit hard by measures to prevent the spread of COVID-19. With sales expected to slow, she's already had to make some difficult decisions.

"I'll have to lay off some employees and then I'm hoping the new 75 per cent wage subsidy will work for one employee that I could have work from home,” said MacLachlan, adding the measures have also impacted her ability to produce new products. “We all work in pretty close quarters, hands on, sewing, cutting making things.”

Restrictions on public gatherings and physical distancing rules mean she may not be able to get her clothing to customers at local shows. Those shows, she said, account for 90 per cent of her sales.

She said it's affecting her small workforce made up of fewer than 10 employees and contractors.

"The hard part with this whole thing going on right now is my business is seasonal and I just invested the last three months, every last cent of credit I had to buy all my fabric for my biggest season yet, but now that season's on hold,” said MacLachlan.

The exact details of the wage subsidy program haven’t been released, but the Canadian Federation of Independent Business said the move could help many small and medium-sized businesses and their employees.

"This has the potential to be an absolutely phenomenal initiative,” said CFIB Prairie region director Jonathan Alward. “It's something that's really been our top ask at the federal level."

Alward said key questions include: who qualifies, are there any caps per employee or employer, and whether businesses will be required to pay an employee’s entire wage.

"This takes a lot of weight off their shoulders and certainly gives a lot of certainty to the employees and we look forward to finding out the rest of the details on Monday,” said Alward.

MacLachlan's busy shifting her focus to her website, hoping online sales can help the company stay afloat during the pandemic.

She's also busy trying to figure out exactly what financial assistance her business and employees are qualified to receive.

"Just trying to figure out anything because I am really scared that I'll lose my business,” she said.

The federal government also announced Friday businesses can access loans of up to $40,000 with no interest for the first year.

Provincially, the Manitoba government said Friday it’s allowing employers to keep staff laid off longer without having to terminate their jobs. Finance Minister Scott Fielding said this will give companies greater flexibility and will allow employees to be rehired after the pandemic ends.